In the News: Tips for Choosing a Tax Preparer from the AICPA

Posted by James Schiavone on Feb 17, 2012

Each year the news media seems to begin their coverage of tax season a little earlier than the year before. The Media Relations team at the AICPA works year-round to educate reporters and provide accurate and actionable information for filers. This helps ensure that during tax season the public understands the value of a CPA as a tax preparer who can help them navigate the complicated and constantly changing IRS rules. With two months until the deadline to file most 2011 returns, I present to you, dear readers, some recent articles quoting AICPA staff and volunteer leadership on tax season issues.

Eileen Connelly of the Associated Press spoke to Melissa Labant, CPA of the AICPA’s Tax team for an article on how filers can find a tax preparer who they can trust. Labant suggests that, if you're expecting to claim a lot of business-related expenses, ask colleagues from work or professional organizations if they know a CPA who focuses on your industry. And along the same lines, if you own a small business, it’s crucial to ensure that the CPA has experience with small businesses. If they’ve worked with small businesses in your industry, that’s even better.

Melissa Labant was also quoted in an article in the Virginian Pilot offering more tips on finding a tax preparer, as well as some red flags which may indicate you should avoid a particular preparer. Labant says that all paid tax preparers must have a Preparer Tax Identification Number and that you should ask for their number. “If they give you a look like they don't know what you're talking about, that's a red flag," Labant said. Don’t hesitate to ask questions about what fees you will be charged and the process for receiving refunds. Avoid preparers who charge fees based on a percentage of your refund or who promise bigger refunds than their competitors. According to Labant, if a preparer doesn't ask for a copy of your previous year’s return or completes your return without providing you a copy that should raise a red flag. The article stressed that it’s also important to make sure you can contact your preparer even after April, in case questions come up, or if you’re audited by the IRS.

Annette Nellen, CPA of the AICPA Individual Taxation Technical Resource Panel,spoke to Credicards.com about peoplewho qualify for an exemption to avoid paying taxes on forgiven credit card debt and don't take advantage of it, simply because the IRS tax forms and publications can be difficult to understand. While insolvency is one of the key avenues for avoiding paying taxes on canceled credit card debt, studies show the low-income families most likely to meet the insolvency criteria, don't take the exemption. "There are some people who are so far in debt and they don't have a lot of assets," says Nellen. "They don't have a house. They don't own a car. For them, it's pretty clear that they are insolvent.” While high levels of debt may cause people to be focus on issues other than taxes, making sure you take all the exemptions you qualify for is one way to lower your tax burden.

Do you have any tips for selecting the CPA best suited to filing your personal or business return? Or want to highlight some little known deductions or exemptions that could save tax payers some money? If so, let me know in the comment section.